Entrepreneurial engagement and technical grants funding: Analysis of structurally behavioural determinants and economic factors

Entrepreneurial activity promotes economic growth and social development, particularly in emerging economies such as South Africa. This study investigates the influence of structural-behavioural determinants and economic factors on entrepreneurial engagement, focusing on the role of technical grants using Dynamic Ordinary Least Squares and Fully Modified Ordinary Least Squares for long-run analysis, variance decomposition from the Vector Error Correction Model (VECM) for dynamic impact assessment, and VECM for causality analysis. The Autoregressive Distributed Lag and Canonical Cointegrating Regression models were employed for robustness checks, and the results remained consistent across these methods. The findings reveal that greater business freedom negatively influences entrepreneurship, suggesting that intensified competition and regulation may hinder small-scale ventures. Conversely, higher start-up costs, Technical Cooperation Grants, and Educational Attainment positively influence entrepreneurial activity, indicating the significance of necessity-driven entrepreneurship, financial support, and human capital development. Variance decomposition shows the lasting impact of technical grants on entrepreneurial engagement, while causality analysis confirms long-run unidirectional relationships between technical grants and key variables. The study stresses the need for regulatory reforms to support small-scale entrepreneurs, expanded technical grant programs with mentorship support, and greater investment in entrepreneurial education.